News buyback signals ‘vote of confidence’

Up to $500 million will be paid back to News Corporation shareholders as CEO Robert Thomson signals his confidence in the future of the company after its 2013 de-merger.

The company has not bought stock back from shareholders since the split between the former News Corporation’s entertainment business, now 21st Century Fox, and the news and publishing business.

“We had indicated to investors that we needed two years to set the new News firmly on a digital and global course, and are confident that the substantial progress made thus far enables us to take this positive action ahead of schedule,” Mr Thomson said in statement to the ASX.

“The development of our print businesses, the prudent extension of our portfolio and the stewardship of our resources mean that we are able to consider our capital allocation options from a position of strength.”

News Corp posted a slight fall in revenue for the financial year’s third quarter last week, and blamed the 2 per cent drop on foreign currency fluctuation and lower advertising revenue, which decreased 12 per cent.

However, Mr Thomson said the company’s acquisitions of real estate websites realtor.com and Move had proven to be smart.

“News Corp is now a global leader in digital real estate,” he said. “The new News Corp continues to build a firm foundation for digital growth.”

The company’s Australian arm was also supported by strong growth in the digital real estate space. REA Group, publisher of realestate.com.au, experienced a 21 per cent jump in revenue, reeling in $384 million.

“Our buyback program is clearly a vote of confidence in the company’s prospects, and its potential,” Mr Thomson said.

Both Fairfax Media and Nine Entertainment have also initiated buybacks recently.